In NC, most mobile home parks do not sell the land.
I thought the point of buying a property is to eventually own it outright.
If you pay off the mobile home but find yourself unable to pay the lot rent… you can still get evicted. This situation persists forever, unless you move the home.
Buying land with utilities and moving the home is so expensive that most people would have to take out a personal loan or multiple loans to do it.
Personal loans are usually restricted to people with high incomes and/or credit scores. (People who can simply skip the park and buy a house on land in the first place).
Paying the lot rent and mobile home combined also makes it not a particularly cheap alternative to renting a house.
But so many people do it that I feel like I must be missing something that connects the dots and makes this make sense (logically and financially).
What am I missing?
ETA – sorry if this is a very stupid question. My parents were city people so I genuinely do not know how people benefit from using parks
In: Economics
In general , that is their business practice and it is fairly predatory.
The ELI5 is that it’s designed that way to make money off poor people.
They don’t, mostly. Those things are predatory.
They sell you on being able to own a home at a much lower cost than a permanent structure + land, making it achievable for people who dont have the downpayment or credit available to afford a standard SFH. Then they just keep collecting leases indefintiely, either from renewals or from releasing the plot after someone is evicted.
Because they aren’t responsible for the structures their maintenance costs are minimal compared to more standard landlords.
The purpose of a mobile home park is to create an entire community that is trapped paying rent forever, regardless of whether or not they own their home. It is intended to benefit whoever owns the land, not the residents.
You seem to understand mobile homes perfectly. They are not a way to build wealth, they are a way to have cheap rent. A mobile home in a park can be cheaper than apartment rent. If one wants an asset that appreciates they need to put the mobile home on land.
The only thing you are missing is that lot rent and the actual mobile homes used to be much cheaper. Up until the 2000s lot rent in some areas was as low as $60 a month. On top of that, moving a mobile home has gotten expensive. I think the average cost to move a mobile is around $4k. With the housing crisis in full swing right now, it’s actually affecting mobile home prices. It never really done that in the past. Now private equity firms have realized that mobile home parks are a great place to purchase and then bulldoze under to build more expensive houses.
It is an investment vehicle for the land owner, just like any other rental. If something doesn’t make sense it’s because you aren’t looking at it from the right perspective ie who already has money.
A mobile home is not real estate. It’s a fancy car with indoor plumbing. In a mobile home park, you’re paying to rent a parking space with utilities.
As for how people benefit? They don’t.
It’s a great question! Mobile home parks can be confusing. Many people choose them because they can be more affordable than traditional houses. While it’s true you don’t own the land, the upfront costs are usually lower, which can help people who might not have enough money for a house.
Some folks also like the community feel of parks and the flexibility they offer. However, as you mentioned, the lot rent can make it tricky, especially if finances are tight. It’s definitely a tough balance! Not a stupid question at all—these are important things to consider when thinking about housing options.
It used to be substantially cheaper than renting a house.
Most people don’t move into trailer parks because that’s what they really want. They do because they can’t afford a fully detached conventional house. It’s still nicer than an apartment in that you have at least a little bit of seperation between neighbors, have windows on all sides of your trailer, can step out into grass and your car is a few steps away.
Ditto to everything all the other commenters have said (about it generally just being a predatory practice), with one addition… there are places where you buy the lot in addition to the home.
I know someone in this arrangement. The purchase cost is higher, but still cheaper than buying a traditional home because the quality is lower/lack of foundation/etc
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